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Balancer Launches Aave Boosted Pools to Increase LP Yields -Breaking

by Mike Robinson

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To Increase the LP Yield, Balancer Launches Aave-Boosted Pools

Balancer Labs today announced the launch of Boosted Pools. Boosted Pools are designed to reduce capital inefficiency by offering yields on tokens that have been deposited into Automated Market Maker Pools. The first iteration of this groundbreaking product will be with Balancer’s close collaborator, lending protocol Aave.

“The collaboration with Aave as the first iteration of the Boosted Pools launch is a natural fit and solidifies their place in the Balancer ecosystem. There are various levels of Boosted Pool (NASDAQ:) innovations that lead to concrete results, deeper liquidity, more efficient integrations for liquidity, and higher yields.”
– Fernando Martinelli, Balancer Labs CEO & Co-Founder.

AMM pools typically have 10% liquidity available for traders. This is because trade size and liquidity are often smaller than what they can hold. Boosted Pools let you deposit the rest of your liquidity into lending protocols that earn additional yield.

AMM Pools have historically used wrapped tokens of yield bearing assets aDAI to increase capital efficiency. This has helped improve the pool’s yield. Problem is, wrapping and unwrapping tokens cannot be done without a relayer. It also takes too long to do during a swap. Aave Boosted Pools make it easy to wrap/unwrap tokens while in a swap. It also makes it less costly.

Lending protocols are often very costly to enter or leave. Boosted Pools could be a great option for liquidity providers and traders. Users can set up a Boosted Pool to allow them to place a certain percentage of their liquidity into a pool that allows for money markets such as Aave, and then keep the rest in the pool for liquidity trading. A portion of the liquidity that’s deployed to Aave will be redeemed via the Aave platform, and all distributions that Aave pools may have.

“The collaboration with Balancer for the launch of Aave Boosted Pools is a prime example of incredible innovation happening in DeFi. I have been following Balancer’s V2 launch closely and Boosted Pools offer users deeper liquidity and more access to Aave. With the help of Balancer, we look forward to providing users a seamless earning experience.”
– Stani Kulechov, Aave Founder & CEO.

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